The undeniable transformational impact of tech on M&A means traditional companies are no longer looking to expand their global footprint or increase the volume of the workforce. Instead, companies are engaged in acquiring technology and technological expertise through external means through acquisitions and JVs.
Technology is the biggest disruptor in traditional M&A today.The utilization of and investment in technology are seen as ways to alter the scale and nature of business operations. Additionally, it has become a way to future-proof businesses and allow them to place a potentially greater emphasis on sustainability.
Understand the Key Insights
- Tech-related M&A is on an upward trend. From 2016 to 2020, corporate investment in technology will increase by a projected 13% to reach USD 2.4 trillion per year.
- Businesses are looking to acquire companies that can value-add through tech expertise, thereby strengthening existing infrastructure to increase market share or become a disruptor in the market.
- Two types of M&A deals are more prevalent; mega deals and smaller tech-play deals where industrials acquire either technology (IP or software) or innovators.
- The increasing complexity of tech-related M&As means businesses must refocus efforts on navigating regulatory requirements, and on training and nurturing a more agile workforce.
- There is an increasing attention to the political nature of M&A activity especially in dealing traditional businesses with strong ties to national identity.
From operations to workforce and even national identity, tech is forever changing the way manufacturing, construction, chemicals, automotive and energy sectors are transforming their businesses.